Your French company is profitable, the money sits in a French bank account, and you live in London, New York, Dubai or Singapore. You want to know how to move that profit to yourself without triggering a French tax reassessment, a dispute with a co-shareholder, or a claim for repayment two years later. This guide answers that exact question for foreign founders and foreign parent companies holding a French SAS (société par actions simplifiée, the flexible joint-stock company most foreigners choose), a SARL (société à responsabilité limitée, the closed limited-liability company), or a French subsidiary. Throughout this article, every French acronym is explained: Kbis (the official company identity extract issued by the greffe, the registry office of the commercial court), BODACC (the official bulletin publishing company events), URSSAF (the social-security collection agency), DSN (the monthly payroll return), IS (impôt sur les sociétés, French corporate income tax), and DRFiP (the regional tax directorate handling non-residents).

The method below follows the order a careful lawyer follows in practice. First, make the dividend lawful under French company law, because an unlawful distribution must be repaid. Second, cut the French withholding at source and recover any excess under the applicable tax treaty or European Union law. The starting point of the whole process is described in our setting-up guide for foreign founders, which explains the bank account, the Kbis, VAT and first hire of a French company held from abroad, and the present article builds on it for the profit-extraction stage.

I. Vote lawful dividends from France while living abroad and prove the distributable profit

Before any tax optimisation, the distribution must exist in company law. French courts order shareholders to repay dividends that were voted without distributable profit, even if the tax was correctly withheld. A foreign shareholder who lives abroad is not excused: the resolution is examined under French law, the place of residence changes nothing, and the repayment action can be brought by the company, a liquidator, or a new majority shareholder after a sale.

A. How foreign shareholders approve accounts, compute distributable profit and file proof at the greffe

The annual general meeting (assemblée générale ordinaire) must be held at least once a year, within six months of the financial year-end, to approve the accounts. Article L. 225-100 of the Commercial Code states that rule for companies with a board, and the SAS follows the same calendar through its articles, with a court extension available when the deadline cannot be met. In practice, a foreign president (président, the legal representative of a SAS) or a foreign gérant (the manager of a SARL) organises the meeting by video link where the articles allow it, signs the minutes electronically, and sends the accounts to the accountant in France for filing at the greffe within one month of approval, or two months for electronic filing.

The distributable profit is a legal concept, not the bank balance. Article L. 232-11 of the Commercial Code provides that:

“Le bénéfice distribuable est constitué par le bénéfice de l’exercice, diminué des pertes antérieures, ainsi que des sommes à porter en réserve en application de la loi ou des statuts, et augmenté du report bénéficiaire.” (Article L. 232-11 of the Commercial Code)

In plain English: start from the profit of the year, subtract prior losses and the mandatory allocations to reserves, then add retained earnings carried forward (report à nouveau). The meeting may also distribute sums taken from available reserves, but the resolution must name the reserve accounts used, and dividends are taken first from the distributable profit of the year. No distribution is allowed when equity would fall below the share capital plus non-distributable reserves, except in a capital reduction. The revaluation surplus is never distributable.

Once approved, the accounts of most companies must be filed at the greffe and published, with a BODACC notice. That filing is your evidence. When a bank, a treaty-refund office, or a co-shareholder asks where the dividend came from, you produce the signed minutes, the approved balance sheet, the equity bridge showing capital plus reserves, and the filing receipt. Foreign founders often skip this step because the accountant “takes care of it”. Ask for the filing receipt every year and keep it with the Kbis of the year. The Kbis proves the company exists; the filed accounts prove the dividend existed lawfully.

The vote itself follows the articles. In a SARL, dividends require a majority of the shares on first call; in a SAS, the articles define the majority at its discretion, which is why most foreign founders choose the SAS for full control. Document the convocation, the quorum, the majority, and the payment date. Pay by bank transfer from the company account to the shareholder account stated in the minutes, and label the transfer “dividends FY 2025 per AGM of [date]”. A labelled transfer defeats later arguments that the money was salary, a shareholder loan (compte courant d’associé, the current account through which a shareholder lends to the company), or a hidden distribution.

Minority protection matters even when you control the company from abroad. A systematic retention of all profits in reserves while the majority takes management fees can be attacked as abuse of majority (abus de majorité). Conversely, a minority shareholder who blocks every distribution without business reason can commit abuse of minority. The practical shield is a written distribution policy: investment needs, cash buffer, and a dividend ratio voted each year. Courts accept reserves for genuine projects; they sanction reserves used to starve a minority holder. If you are the foreign majority holder, minute the business reason for the retained portion every year.

B. How interim dividends, unlawful dividends and shareholder loans expose foreign owners to repayment

Many foreign owners want money during the year, before the annual approval. French law allows interim dividends (acomptes sur dividendes) but under strict conditions. Article L. 232-12 of the Commercial Code opens with the rule:

“Après approbation des comptes annuels et constatation de l’existence de sommes distribuables, l’assemblée générale détermine la part attribuée aux associés sous forme de dividendes.” (Article L. 232-12 of the Commercial Code)

The same article allows interim payments only when a certified interim balance sheet, reviewed by the statutory auditor (commissaire aux comptes) where one exists, shows a profit after depreciation, provisions, prior losses and required reserves. The interim amount cannot exceed that profit. The closing sentence of the article is the warning every foreign founder should memorise: “Tout dividende distribué en violation des règles ci-dessus énoncées est un dividende fictif.” (Article L. 232-12 of the Commercial Code)

A fictitious dividend (dividende fictif) must be repaid. The Cour de cassation (the French supreme court for civil and criminal matters) applies this rule without hesitation. In a leading case on interim dividends paid before a sale, the First Civil Chamber held that the sums at stake, in the words reported by the official case database:

“constituaient des dividendes fictifs pour avoir été distribués en violation des exigences de l’article L. 232-12, alinéa 2, du code de commerce” (Cour de cassation, First Civil Chamber, 20 March 2014, No 13-11.841).

Criminal law goes further for deliberate cases. The Criminal Chamber has examined prosecutions for presentation of false accounts and distribution of fictitious dividends alongside abuse of corporate assets, and it analyses each payment date, each meeting, and each balance sheet separately (Cour de cassation, Criminal Chamber, 12 November 1998, No 97-86.621). A foreign director who signs minutes from abroad is judged like a director sitting in Paris. Never backdate minutes, never vote a dividend on the basis of an uncertified draft balance sheet, and never label a cash advance as a dividend when the interim accounts are not ready. Call it what it is, a shareholder loan, with a written agreement, interest terms, and a repayment date.

Shareholder loans deserve a warning because foreign owners use them as a shortcut. A credit balance in your favour can be repaid at any time, but a debit balance (money you owe the company) in a SARL or SAS with a natural-person manager can be reclassified as an unlawful payment, and with-no-interest long-term loans to shareholders attract tax adjustments. If you advance funds to the French company, sign a compte courant agreement, set an interest rate at or above the tax-deductible threshold published quarterly by the tax administration, minute the repayments, and keep the company solvent. If the company later enters insolvency (procédure collective, the court-supervised insolvency process), interest on shareholder loans stops accruing and recent repayments can be challenged. Dividends, once lawfully voted and paid from genuine profit, do not carry that claw-back in the same way, which is one more reason to prefer a clean annual dividend over informal drawings.

The Paris check offices see one recurring file: a foreign-owned SAS pays monthly “dividends” by standing order, without any meeting, then files accounts showing a loss. The administration reclassifies the transfers as salary or management fees, adds social charges through URSSAF, and the company must then sue its own shareholder for repayment of fictitious dividends. One annual meeting, one certified computation, one labelled transfer avoids that entire chain.

II. Pay less withholding on French dividends and recover the excess from abroad

Once the dividend is lawful, France taxes it at the border when the recipient lives abroad. The paying company withholds (retenue à la source, the deduction made by the payer before the money leaves France), and the foreign shareholder claims a treaty reduction or a European exemption. The order matters: the company withholds correctly on the payment date, then the shareholder recovers. A foreign founder who confuses the two stages either overpays and never claims, or under-withholds and leaves the French company liable for the shortfall plus penalties.

A. How France withholds on dividends paid abroad and how treaties and EU law reduce the rate

The starting point is domestic law. Article 119 bis of the General Tax Code provides that:

“Les produits visés aux articles 108 à 117 bis donnent lieu à l’application d’une retenue à la source dont le taux est fixé par l’article 187 lorsque leurs bénéficiaires effectifs sont des personnes qui n’ont pas leur domicile fiscal ou leur siège en France” (Article 119 bis of the General Tax Code)

The rate itself is set by Article 187 of the General Tax Code, currently 25% for dividends paid to non-resident companies, subject to treaty reductions. The concept of distributed income is defined broadly by Article 120 of the General Tax Code and the surrounding provisions, which cover dividends, interim dividends, and most distributions voted by the meeting. For individuals resident in France, a different mechanism applies: Article 117 quater of the General Tax Code imposes a 12.8% deposit (prélèvement forfaitaire non libératoire) on dividends paid to French-resident individuals, which is then credited against the single flat-rate tax or the progressive scale. That 12.8% deposit does not apply to a shareholder who is not a French tax resident; the non-resident is under Article 119 bis withholding instead. Mixing the two regimes is a frequent error in SAS minutes drafted from abroad.

Treaties (conventions fiscales, the bilateral agreements allocating taxing rights between France and another State) then reduce the French withholding, typically to 15%, 10%, 5% or 0% depending on the recipient, the holding percentage, and the holding period. The France-United States treaty, the France-United Kingdom treaty, and the France-United Arab Emirates treaty each have their own dividend article with distinct rates and beneficial-owner conditions. The practical consequence is that the same 100,000 euro dividend voted in Paris costs 25,000 euros of French withholding at the domestic rate but may cost only 15,000 or 5,000 euros once the correct treaty article is applied. The difference is claimed, not granted automatically: the French paying company applies the treaty rate on payment only if it holds, before payment, a valid residence certificate (form 5000 series) and a beneficial-owner declaration for that year. Without those papers in hand on the payment date, the company must withhold at 25% and the shareholder claims the excess back later.

Inside the European Union and the European Economic Area, a stronger relief exists for parent companies. Article 119 ter of the General Tax Code states the principle:

“La retenue à la source prévue au 2 de l’article 119 bis n’est pas applicable aux dividendes distribués à une personne morale qui remplit les conditions énumérées au 2 du présent article par une société ou un organisme soumis à l’impôt sur les sociétés au taux normal.” (Article 119 ter of the General Tax Code)

The conditions include effective management in the European Union or European Economic Area with administrative assistance, an eligible legal form under the Parent-Subsidiary Directive 2011/96/EU, and a direct holding of at least 10% maintained for two years. A German, Dutch, Spanish or Irish parent holding a French SAS for more than two years with 10% or more can therefore receive the dividend with zero French withholding, provided the file proves beneficial ownership and the holding period. Below 10%, or before the two years expire, the treaty rate applies instead. Document the acquisition date, the percentage, and the uninterrupted holding; a holding that dips below the threshold, even briefly, restarts the analysis.

Two further domestic layers complete the picture. When the French recipient is itself a company, the parent-subsidiary regime of Article 145 of the General Tax Code and Article 216 of the General Tax Code allows a French parent holding at least 5% to exclude the dividend from taxable profit except for a 5% (or 1% within a tax group) charge for costs. A foreign founder who holds the French operating company through a French holding company therefore pays almost no French tax on the upstream dividend, and the withholding question moves to the second-tier distribution from the holding to the foreign owner. The choice between direct foreign ownership and a French holding depends on the treaty network, the exit plan, and the cost of running a second company; model both routes before incorporating, because restructuring after profits arise costs more.

Case law has reshaped refund claims for non-residents. In a widely followed dispute, a Belgian company sought repayment of French withholding levied on dividends received from 1999 to 2005. The Conseil d’État (the supreme court for administrative and tax disputes) recorded that the company:

“a demandé le remboursement de la retenue à la source qui avait été prélevée, en application des dispositions du 2 de l’article 119 bis du code général des impôts combinées avec les stipulations de la convention fiscale du 10 mars 1964 conclue entre la France et la Belgique, sur des dividendes qu’elle avait perçus d’une société française de 1999 à 2005” (Conseil d’État, 19 May 2025, No 491417, Groupe Bruxelles Lambert, published in the Lebon collection).

The same decision recalls the Sofina case law of the Court of Justice of the European Union, under which:

“les articles 63 et 65 du traité sur le fonctionnement de l’Union européenne doivent être interprétés en ce sens qu’ils s’opposent à une réglementation d’un État membre en vertu de laquelle les dividendes distribués par une société résidente font l’objet d’une retenue à la source lorsqu’ils sont perçus par une société non-résidente” (Conseil d’État, 19 May 2025, No 491417)

when a resident company in the same situation would be taxed only if profitable, possibly never. The lesson for foreign founders is concrete: where the withholding produces a heavier cash burden than the taxation of a French resident, European law may support a refund claim even beyond the treaty rate, but within strict time limits and procedural channels. The Conseil d’État in the 2025 case split the years, sending part of the file back to the Paris administrative court of appeal and rejecting the claim for the oldest years as out of time. Deadlines decide these cases as often as substance.

B. How to claim the treaty refund from abroad, arbitrate salary against dividends and challenge a reassessment

The refund file is prepared before the dividend is voted. Collect the residence certificate for the year of payment, the treaty form 5000 with the foreign tax office stamp, the 5001 computation where the treaty requires it, the shareholder register showing the holding percentage, proof of the holding period, the minutes voting the dividend, the bank proof of the withholding paid to the French Treasury, and the filed accounts. The French company files the withholding return (form 2777 and its online successor) and pays the Treasury within the month; the foreign shareholder then files the refund claim with the French non-residents tax office with the stamped forms. Late or unstamped forms are the most common reason for rejection. Start the stamping process with the foreign tax office at least two months before the planned payment, because some offices take weeks to return the certificate.

For individuals, the arbitrage between salary (or president remuneration) and dividends is the central planning question. Salary paid by the French company is deductible from corporate profit but taxed as employment income with French social charges, which are heavy: employer and employee contributions collected through the DSN and controlled by URSSAF often exceed 40% of gross for high earners, with the manager affiliated either as an employee-like director (assimilé salarié, the social status of a SAS president with employee-style coverage but no unemployment insurance) or as a self-employed worker (travailleur non salarié, the status of most SARL managers with a different contribution base). Dividends are not deductible, bear IS at 25% at company level (standard rate, reduced 15% on the first 42,500 euros for qualifying small companies), then withholding at payment, but carry no social charges for a non-resident shareholder who does not work in France. A foreign founder who also manages the company from abroad must therefore compare three routes each year: remuneration for real management duties with a written management agreement and transfer-pricing logic, dividends for return on capital, and a mix of both. Paying yourself only through dividends while working full-time in France invites reclassification; paying only salary while profits accumulate wastes the dividend route. Minute the choice, align it with the actual work performed in France, and keep timesheets, board reports, and travel records.

When the administration disagrees, the challenge follows the tax litigation path. The claim (réclamation, the written objection sent to the tax office) must be filed within the time limit, generally by 31 December of the second year following the withholding, with a full copy of the file. Article L. 190 of the Tax Procedures Book assigns such claims to the tax courts when they seek relief based on a legislative provision or a treaty right. If the office rejects expressly or stays silent for six months, the taxpayer may go to the administrative tribunal (tribunal administratif), then to the administrative court of appeal, then to the Conseil d’État on points of law. The 2025 Groupe Bruxelles Lambert ruling shows that even a strong European-law argument fails when the claim for the oldest years is late or filed through the wrong channel. File protective claims early, even while negotiating with the office, and track each dividend year separately, because limitation runs year by year.

Three operational errors return in almost every foreign-shareholder file examined in Paris. First, the treaty forms are requested after payment, so the company over-withholds and the cash stays with the Treasury for a year. Second, the shareholder changes bank details or holding structure mid-year, breaking the beneficial-owner chain, and the refund office asks who really owned the shares on the payment date. Third, management fees from the foreign parent are deducted in France without a written service agreement, timesheets, or a mark-up study, so the administration denies the deduction under transfer-pricing rules and the group pays tax twice. Each error is avoidable with a calendar: forms in quarter one, minutes and payment in quarter two after approval, refund claim in quarter three, archive with the Kbis and the greffe receipt in quarter four.

For founders in Paris and the Île-de-France region, two local points deserve attention. The competent office for most non-resident withholding and refund claims is the DRFiP and the national non-residents service, with filings increasingly online through the impots.gouv.fr portal (the official French tax website), while company-law filings go to the Paris greffe and the INPI single window (the online company-registration portal that replaced the former centres de formalités). Delays at the Paris greffe around the summer and year-end closing mean foreign presidents should approve accounts early in the six-month window rather than in the final week, so the dividend, the withholding return, and the treaty file can all be processed before the August slowdown.

Conclusion

Taking profits out of a French company while living abroad is a two-stage operation. Vote a dividend that would survive a court challenge by computing the distributable profit, approving the accounts on time, and filing them at the greffe, then move the cash with the lowest lawful withholding by preparing treaty forms before payment, using the European parent exemption where the holding qualifies, and claiming the excess back year by year. Keep the minutes, the accounts, the bank proof, and the Kbis together, separate salary for real work from dividends for return on capital, and file protective claims before deadlines expire. That file is the difference between a profit that reaches your foreign account and a profit that stays in France as tax, penalties, or a repayment order.